Increased Copper Price Lifts Mining Stocks

The earthquake in Chile, the leading producer of copper in the world, two days ago closed up to one fifth of its copper mines and pushed the price of copper to its highest level for five weeks on the London Metal Exchange. Three-month copper rose to $7,365 a ton from $7,195 on Friday.

Dominic Turner
shareprices.com - Monday, March 01, 2010

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The events in South America initially sparked speculation that copper could revisit a 2010 peak, but mines have already resumed operations; Anglo American, for example, said that it had restarted production at four of its copper mines, which deliver over 50% of its output, in Chile after the earthquake cut power for a period.

Anglo American's share price closed up 60p or 2.51% at 2,450p, but there was strength throughout the mining sector, which helped to offset weakness amongst financial stocks. Eurasian Natural Resources Corporation (ENRC), whose copper mining operations are focused on Chile, closed up 39p or 3.88% at 1,066p and was joined in positive territory by Kazakhyms, up 69p or 5.15% at 1.40p, Fresnillo, up 32p or 4.26% at 782.5p and Xstrata, up 37.5p or 3.64% at 1,067.5p.

Rio Tinto announced plans to increase its stake in Canadian mining firm Ivanhoe mines from 19.7% to 22.4% at a cost of £233 million. The move is part of a joint venture between the two companies to develop the Oyu Tolgoi copper mine in Mongolia and lifted Rio Tinto's share price to 3,468.5p, up 104.5p, or 3.11%.

Overall, the FTSE 100 closed up 51.42 points or 1% at 5,405.94 after reaching 5,420.83 – a five-week high – earlier in the day.

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